4/12/2001 @ 6:00PM

Downsized, But Not Out

Companies may be firing, but they’re also hiring–sometimes at the same time.

Citigroup
, for instance, dismissed hundreds of operations and tech workers who were made redundant by mergers last week, but is still hiring investment bankers and capital markets analysts.

Telecommunications company
Level 3 Communications
is cutting 325 network construction workers, but says it’s still looking for people in network operations and sales. Last week rumors circulated that
Morgan Stanley
would lay off thousands of workers; the company responded by saying it’s actually hiring 2,500 new financial advisers this year and is recruiting experienced brokers. Still, that doesn’t rule out other layoffs for the investment bank.

Surprisingly, many of the companies that are actively hiring are the small ones with between 15 and 150 people on the payroll. These firms had vacant positions languish during the recent employment boom, because they couldn’t compete with deep-pocketed big companies for applicants. Now they can finally get in the game. So while the good news is that small companies are still hiring, the bad news is that for many job seekers, new employment will probably come with a reduction in status and salary.

“Sometimes these are positions that have been open for a while, but now they can get employees for a realistic salary,” says Eileen Levitt, president of The HR Team in Columbia, Maryland. “It’s a return of sanity to the job market.”

Levitt says the 60 small companies in the Washington, D.C., area that she helps staff are still hiring, thanks to this shift in worker demand. “Profitability was always an issue for the companies we work for,” she says. “They didn’t get free money.” Now they don’t have to compete with overfunded startups.

As for the types of employees companies are interested in these days, idea people are out, and those who can execute are in. Bonnie Gwin, a managing partner at executive recruiting firm Heidrick & Struggles, says she’s sees a growing demand for operations experts who can help companies cut costs and streamline operations. Generally that requires professionals with more experience. “Everybody is being really cautious. Companies need people who really know what they’re doing,” says Gwin.

Also still very much in demand are information technology professionals, despite the tech market’s downturn. Most IT jobs aren’t actually with technology companies but with industries like banking and manufacturing, since they all rely on technology.

“There still aren’t enough IT workers to go around,” says Tinabeth Burton of the Information Technology Association of America. U.S. companies hope to hire 900,000 IT workers this year, according to a survey of 685 companies conducted by ITAA. That’s a drop in demand of about 44% from last year, but the Association says that nearly half of these positions won’t get filled because of a lack of qualified workers. And it’s unlikely that talent will soon be freed up: After having such a hard time hiring their tech experts, companies are keeping them–even as they lay off hundreds in other departments.

The Bureau of Labor Statistics‘ (BLS) data predicts that the top five fastest-growing job markets between now and 2008 will be computer engineering, computer support, systems analysis, database administration and desktop publishing. Systems administration is expected to create the most new jobs.

But even for people without these particular specialties, there are still jobs out there despite all the unemployment hype. Since December 2000, there has in fact been a net increase of 343,000 jobs, according to the BLS. And historically speaking, March’s 4.3% unemployment rate is still extremely low. Consider the fact that in 1998, when things were booming, the rate was actually higher, at 4.5%.